Drug treatment of panic disorder is reviewed with focus on recent controlled studies. The efficacy of alprazolam, a triazolobenzodiazepine, and imipramine, a tricyclic antidepressant, has consistently been demonstrated, but there is reasonable evidence that other benzodiazepines or antidepressants might also be effective if equipotent doses are used. Most controlled studies demonstrate drug efficacy on several psychopathological symptoms, including the core symptom panic attacks. Limited evidence indicates that alprazolam may be more efficacious in treating panic attacks than avoidance behaviour, and the reverse when imipramine is concerned. Drug efficacy appears to be most consistently documented in moderately to severely ill panic patients. The benzodiazepines are better tolerated than antidepressants in terms of patient acceptance, and the improvement sets in faster with benzodiazepines. In the presence of depressive symptoms considered secondary to panic attacks and/or agoraphobia, both types of drugs appear efficacious. Difficulty discontinuing high-dose benzodiazepine treatment remains the most important side effect of the treatment but sedation can, like anticholinergic side effects of the tricyclic antidepressants, be troublesome, thereby diminishing patient compliance. The role of newly developed antidepressants with a more specific mode of action and milder side effects awaits evaluation in controlled trials.